Are energy companies cashing in on the boiler scrappage scheme?

Leading energy suppliers are under fire this week amidst allegations they are cashing in on the boiler scrappage scheme. The claim comes from some industry experts accusing them of quoting customers inflated new boiler prices, despite matching the £400 rebate available under the plan.

Designed to cut carbon footprints and energy bills, the boiler scrappage scheme gives households £400 towards replacing their aging boilers with new energy efficient ones. Since its launch at the beginning of the year, it has seen an uptake of over a third of its vouchers, leaving around 70,000 worth £28million available to claim.

The scheme itself is also under attack as some heating specialists believe replacing a working boiler for around £2,000 is ‘financial madness’. Charlie Mullins from Pimlico Plumbers argues, ‘What is the point of replacing a boiler in perfectly good working order? It is financial madness. New energy-efficient boilers are not built to last like the old models — if you get ten years out of them, you’ve done well. We often have to replace boilers that are about six years old.’

Energy suppliers including British Gas, nPower and EON are offering a further £400 discount to match the government’s scheme, saving customers potentially £800 off the cost of a new boiler. Although it sounds like a great deal, some customers claim the prices they are being quoted by energy suppliers are considerably higher than independent heating specialists.

Green Heat’s Peter Thom said ‘The energy suppliers are top-loading the price and then offering an £800 discount. A customer I saw in Cambridge received a quote from British Gas of £5,012 for a boiler replacement, which reduced to £4,212 with the £800 discount. Our quotation for exactly the same work and identical boiler was £2,894.’

British Gas responded by saying ‘We have not increased our prices and they are actually lower now than they were 12 months ago, as we’ve been working with manufacturers to ensure a good deal for customers. The cost of a boiler will vary based on the customer’s home and lifestyle.’

Most households tend to go with a trusted brand when it comes to boiler replacement; however some are confused by the dramatic difference in prices, and wondering if it is worth taking up the scheme. It is advisable to shop around and get at least three quotes, including one from an independent heating company before making any decision.

Households should also consider the longer term benefits of installing an A-Rated energy efficient boiler, rather than its initial cost according to the energyhelpline’s Mark Todd. He advises, ‘Consumers should be aware that the savings come in the long term. The cost of a new boiler is £2,000-£3,000, so a £400 discount means that customers will still need to pay £1,600 to £2,600. With a saving of £200 a year on energy bills, it will take those signing up 8-13 years to break even, when it will probably be time for a new boiler.’

If you are considering replacing your boiler, read our article Boiler Scrappage Scheme – What You Need To Know, and find out if you are eligible. Further information can also be found on the energy advisory website energysavingtrust.org.uk.

 

Sources:

http://www.timesonline.co.uk/tol/money/article7033768.ece

http://www.energysavingtrust.org.uk/Home-improvements-and-products/Heating-and-hot-water/Boiler-Scrappage-Scheme